Purchasing your first home is a significant milestone that can bring excitement and apprehension in equal measure. However, the process can also be daunting as there is a lot to consider, much of it unfamiliar, and it's a major financial commitment.
This article, in conjunction our First home buyers' checklist, provides a step-by-step guide to help you on the journey.
1. Set your budget
Step one of the process is to assess your financial situation and determine the price range you can afford to be looking at. The common assumption is that first home buyers require a 20% deposit to obtain a loan without paying lenders mortgage insurance (LMI). However, this is not always the case, with lower deposit options available for doctors*. Additionally, loan repayment calculatorsare a useful tool for budgeting and seeing how extra repayments and interest changes affect your loan.
2. Get pre-approved for a mortgage
Before you start house hunting, get mortgage pre-approval to demonstrate to sellers and real estate agents that you're a serious buyer. The process involves making an application with a lender who will consider your income, savings, existing debts and future expenses before providing you an indication of how much you may be able to borrow.
3. Research neighbourhoods
Different neighbourhoods provide different lifestyles and features. Consider factors such as proximity to work, schools, cafes, transport and future development plans. Obtaining a property report on a place that's similar to what you're looking for will provide objective information on a property's estimated sale value and suburb growth trends.
4. Make a list of must-have features
You may not have the budget to buy your dream home just yet, but you should still prepare a list of must-have features. Consider the essentials you need for your lifestyle, such as the number of bedrooms and bathrooms, the layout, yard size, home office and parking space. This may be your first step on the property ladder, so consider what will appeal to future purchasers, or whether the property has potential as an investment property that you could rent out.
5. Reach out to different real estate agents
It's great to have a knowledgeable real estate agent who can help you find suitable properties, as well as guide you through the homebuying process, negotiate offers, and handle the relevant paperwork. Reaching out to multiple real estate agents will help you understand the market and what you can expect to get for your budget.
6. Look at lots of properties
Make the time to visit lots of suitable properties keeping in
mind your list of must-have features. Talk through how they compare
with someone you trust and work out which of your required features
become more important and which less so. Once you've found a
home that best suits your needs, hire a qualified home inspector to
assess its condition. This will identify any underlying issues,
repairs or red flags before finalising your purchase.
When purchasing an apartment, carefully review the by-laws,
consider the strata fees and whether any special strata levies
might be on the horizon, and make sure they align with both your
lifestyle and budget.
7. Engaging a solicitor for conveyancing
It is best to get legal advice well before you sign anything. Ask the agent for a copy of the marketing contract for your lawyer to review and ensure you are protected and that all appropriate searches and due diligence are carried out. Having a legal team that understands how stretched for time you are when juggling a medical career can relieve stress at this important stage.
8. Understanding your total costs
It's essential that you take into account all the costs associated with the purchase. These can include stamp duty, agent and legal fees, conveyancing, building and pest inspections plus a variety of fees from your lender. There will also be ongoing costs of rates, utilities, strata fees and insurances, all of which should be factored into your budget.
9. Moving into your new home
After you've purchased your first home, find a suitable removalist to book in a date, update your address on all relevant documents and inform service providers and other suppliers of your change of address. Not having functional utilities when you step into your new home can take the edge off what should be a red-letter day. Once this is all done, don't forget to celebrate the achievement of homeownership. Embrace the beginning of this new and exciting chapter.
Following the First home buyers' checklist and seeking guidance from the experienced legal and finance professionals at Avant, will give you the confidence to navigate through the homebuying process with confidence.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
